Stumbo says he now backs local option sales tax

FRANKFORT, Ky. – The proposed local option sales tax amendment got a significant lift Thursday, as House Speaker Greg Stumbo dropped his opposition and said he will vote for it and work to get other votes for it.

He said the House could vote on the bill as soon as Friday morning.

“Gov. (Steve) Beshear and I had a long talk about it this morning ... and we’re going to try to round up enough support to pass it,” he said.

Since the outset of the session, Stumbo has repeatedly voiced concerns about the local option and said cities and counties should be asking to expand revenue options they already have rather than ask to use the sales tax, which historically is a revenue option exclusively for state government.

But he said Beshear offset those concerns by arguing that if cities and counties gain the power to raise local funds for big construction priorities, they will be less inclined to ask state government for money to help build things like the Yum! Center or enhance Rupp Arena.

The legislation at issue is House Bill 399, which proposes a constitutional amendment that would allow local governments to propose a ballot question asking voters to impose a local sales tax of up to 1 percent for specific capital improvements.

As a constitutional amendment, it needs the votes of a super-majority of three-fifths of House members and senators to pass. If it clears those hurdles, it would be placed on the November ballot for voters to decide.

The bill’s champion is Louisville Mayor Greg Fischer, who stresses that if the amendment passes, then cities and counties would still only gain the right to ask their local voters to approve the temporary sales tax increase for specific capital projects.

“We have a pathway to victory,” Fischer said late Thursday at the Capitol, where he spent the day promoting the bill.

Stumbo said the bill appeared to be a few votes short of the 60 it needs in the House. “But we’re going to see what we can do to shore that up,” Stumbo said. “They had me as an ‘undecided,’ so that’s one.”

Stumbo added that he sees no reason in this election year for rural legislators to fear voting yes on what their electoral opponents are likely to call a “tax” bill.

“They’re never going to experience it,” he said. “They’re not going to do a local option sales tax in Prestonsburg. They’re not going to do one in Hindman.”

Later Thursday, House leaders abruptly ended the House floor session for a caucus of the House majority, which Beshear attended.

Beshear said local option was among several bills discussed in the caucus. The governor did not directly say how he won Stumbo’s support, saying he’d discussed the issue with House leadership several times.

“At the last few meetings we all started coming to an agreement that this would be a good issue to get on the ballot and to allow our local communities this option,” Beshear said.

But the the path for HB 399 remains a long one.

House Speaker Pro Tem Larry Clark, D-Louisville, said Thursday that he remains opposed to it. “I’ve said from day one that if I’m going to vote for a tax increase I’m going to spend the money at the state level for education, health and human services.”

And even if the bill clears the House, it faces a tough test in the Senate.

Senate Majority Floor Leader Damon Thayer, R-Georgetown, declined to predict how his chamber might vote. “We’re not going to consider anything until we see the bills that come out of the House,” he said. “Right now, we’re focused on the budget.”

Supporters of the amendment won another victory earlier Thursday when the House Local Government Committee approved House Bill 551, a measure that clarifies what will happen if both a countywide government and a city within the same county both propose a 1 percent sales tax increase.

The only no vote was cast by Rep. Jim Wayne, D-Louisville, who said the sales tax is a regressive tax that hurts poor people the most. Wayne said he could only support local option as part of a comprehensive plan that gives tax relief to the working poor and raises additional state revenue for education, health and other state programs.

Reporter Tom Loftus can be reached at (502) 875-5136. Follow him on Twitter at @TomLoftus_CJ. Reporter Gregory A. Hall contributed to this story.